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The prices of milk, meat and clothes could all soar if Britain fails to strike a free trade deal with the EU, as tariffs at the border would add to costs facing hard-pressed families.

A “no deal” Brexit risks adding more than 1pc to inflation because it would leave the UK using World Trade Organisation rules and taxes, according to new research. Dairy prices could rise by 8pc, meat almost 6pc, clothing 2.4pc and vehicles 5.5pc, the study published by the National Institute of Economic and Social Research said.

Prices are currently rising faster than wages, harming families’ spending power. That situation is forecast to gradually reverse over the next year.